Despite the ongoing health crisis, and South Africa’s political and economic volatility, Somerset West’s property market has enjoyed a remarkably positive year to date.
Increasing sales
Sales activity across the Western Cape has been in a general decline since the drought of 2017. However, the latest figures from the Deeds Office suggest activity in Somerset West may be on the upswing again.
Roger Lotz, Franchisee for the Rawson Properties Helderberg Group says, “Last year, there were 998 sales concluded in Somerset West.
“In 2021, we were already at 825 sales at the end of August. If that momentum continues, we could see an average of 124 sales per month, with a total of over 1 500 sales by the end of the year.”
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"This would mark a staggering 51% increase in 2020’s sales activity - undeniable proof that market recovery is underway."
Uptick in values
Along with the increase in property, registrations have come a very welcome increase in Somerset West’s average property values. “Until recently, we’d seen very little change in property values since 2017. This was actually a remarkably strong performance for the period when much of the country’s property values were in active decline. That said, we’re extremely happy to turn the corner into positive growth again with a 9.5% increase in the average property value so far this year,” says Lotz.
Ongoing oversupply
Despite increasing sales activity and positive price growth, Somerset West remains in an oversupply situation, with 1 272 of its total 24 038 properties on the market at present.
“With only 998 registered sales in 2020, we do consider this an oversupply. However, this trend is changing, with total listings already down from 1 500 on the market a few months ago. If sales activity maintains its current trajectory and we reach the expected 1500+ registrations this year, we could reach a supply/demand equilibrium by 2022.”
Younger buyers are more active
Somerset West is known for having a stable, mature owner profile, with 70% of current residents over the age of 50. According to Lotz, however, recent statistics show a fresh wave of young blood entering the neighbourhood, with 24% of buyers between the ages of 18 and 35, and 35% between the ages of 36 and 49.
“We’re definitely seeing younger buyers attracted to the beauty, space and lifestyle that Somerset West’s Winelands location offers, particularly now that work from home means they’re not tied to the CBDs,” says Lotz.
“This influx of younger buyers is a good sign that Somerset West remains a safe long-term investment, but it also means sellers need to ensure their listings appeal to a slightly younger target market. A good real estate agent can be an invaluable partner in getting your property in front of the right eyes and making sure it attracts the attention you need.”
Somerset West has currently *335 new property listings, according to Property24 Trends Data with the asking price for the area being R2.69 million. The average sale price per erf for 2020 was about R2.45 million while Section Scheme Units average sale price for the same period is R1.3 million.
The latest residential listings on Property24 show that five-plus bedroom homes are most widely available, at an average list price of R6.5 million. Sellers in the area fall within the 65-years or older (42%) age group, while 28% of buyers fall in the 18-35-years age group.
Lifestyle is a top priority
Work from home hasn’t only increased the number of younger buyers on Somerset West’s property market. According to Lotz, it’s also increased the demand for lifestyle-centric estates where property owners can live, work and play from the comfort of their own homes.
He says the urban edges are expanding. Developments like Sitari and Sea View Lake - both on the outskirts of Somerset West have become extremely sought after for their multi-faceted lifestyle offerings.
The inclusion of shops, restaurants, entertainment spaces, offices, sports facilities, and even schools within lifestyle estates is not yet as common in the Western Cape as it is upcountry, but Lotz believes this could soon change as a result of this shifting demand.
Knowledge is key
While trends suggest a shift towards a sellers’ market could be on the cards in the near future, Lotz says competition on the market remains strong for now. As a result, he says it’s essential for sellers to optimise their listings to appeal to the right target market as early as possible.
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“It’s not a good time to play around and test the market. You really need to get your price right and tailor your descriptions and your images to show why your property is the investment your buyer demographic has been looking for. That’s very difficult to do if you don’t know where you fit in the market or who is looking to buy properties like yours. Working with an experienced local real estate expert can make all the difference to your experience on the market and the sales price you achieve.”
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*Property24 Listings Data Disclaimer: The trends detailed in this article are based on Property24 listings, current at the time of publishing, and property transfer data supplied by Deeds offices, which typically take 3-4 months to reflect. Suburbs are listed according to Property24's geographical database. In some areas this will include both commercial and residential properties. The age demographic data of buyers, sellers and stable owners is determined over a six-month period. These Property Values should not be used as a substitute for independent professional advice and is subject to Property24.com Terms and Conditions
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